Test Item File Ch03

 Human Resource Management: An Asian Perspective (Second Edition)

Chapter 3: Strategic HRM and the HR Scorecard  Multiple Choice

1.

a. b. c. d. e.

2. a.  b.  b. c. d. e.

3. a. b. c. d. e.

A _____ is the company’s plan for how it will match its internal st strengths and weaknesses with external opportunities and threats to maintain a competitive advantage. strategic plan situation an analysis environmental sc scan SWOT analysis tactical plan (a; easy) Which of the following is not part of strategic pl planning? eval evalua uati ting ng the the firm firm’s ’s inte intern rnal al and and exte extern rnal al situ situat atio ion n defi defini nin ng the the busines inesss and and devel evelop opin ing g a mis misssion ion tran transl slat atin ing g th the missi issio on into into stra strate tegi gicc go goals als crafting a course of action implementing strategies (e; moderate) The purpose of a strategic plan it to identify ways to create or maintain a(n)  _____. differential ad advantage competitive advantage instrumental advantage success factor   all of the above (b; moderate)

4. a. b. c. d. e.

What is the first step in the strategic management process? perfor form ext externa rnal and internal audits define the business and and its mission tran ranslate th the mi mission in into st strategi egic go goals als formulate a strategy implement the strategy (b; easy)

5.

A _____ is a general statement of intended direction that evokes emotional feelings in organization members. mission strategic plan code of ethics vision none of the above (d; easy)

a. b. c. d. e.

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 Human Resource Management: An Asian Perspective (Second Edition)

6. a. b. c. d. e.

7. a. b. c. d. e.

8. a. b. c. d. e.

9. a. b. c. d. e.

10. a. b. c. d. e.

Vision statements focus on the _____. past present future all of the above none of the above (c; easy) A _____ lays out what a business strives to be while the _____ lays out what it should be now. mission; vision vision; mi mission dream; vision goal; accomplishment CEO; CFO (b; easy) Defining the business and its mi mission is the __ _____ step in the strategic management process. first second third fourth fifth (a; moderate) Performing external and internal audits is the _____ step in the strategic management process. first second third fourth fifth (b; moderate) The third step in the strategic management process is _____. perfor form ext externa rnal and internal audits define the business and and its mission tran ranslate th the mi mission in into st strategi egic go goals als formulate a strategy implement the strategy (c; easy)

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Chapter 3: Strategic HRM and the HR Scorecard 

11.

a. b. c. d. e.

12.

a. b. c. d. e.

13. a. b. c. d. e.

14. a. b. c. d. e.

15. a. b. c. d. e.

The sa sales director at at We WebMD is is developing go goals regarding sa sales revenue targets and the number of new medical-related content providers like hospitals and HMOs it must sign up per year. Which step of the strategic management process is WebMD working on? perfor form ext externa rnal and internal audits define the business and and its mission tran ranslate th the mi mission in into st strategi egic go goals als formulate a strategy implement the strategy (c; moderate) Several year ears ago, General Motors began a company-wi -wide strategy egy to improv rove  product quality and customer satisfaction. Reports showed that GM’s product recalls for the first half of that year were higher than for the entire previous year. GM explained that the figures supported the corporate commitment to quality and satisfaction. Which step of the strategic management process was GM dealing with? perfor form ext externa rnal and internal audits define the business and and its mission tran ranslate th the mi mission in into st strategi egic go goals als formulate a strategy evaluate pe performance (e; moderate) A __ _____ serves to co communicate wh who a company is is, what it do does, and where it it is headed. mission strategic plan code of ethics vision none of the above (a; easy) The __ _____ of a national en energy ministry is is to to improve en energy sy systems th that support the economy. mission strategic plan code of ethics vision none of the above (a; moderate) The _____ of a national en energy rgy ministry is for the country to have affor fordable, reliable and safe energy supply. mission strategic plan vision code of ethics none of the above (c; moderate)

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 Human Resource Management: An Asian Perspective (Second Edition)

16. a. b. c. d. e.

17. a.  b.  b. c. d. e.

18. a. b. c. d. e.

19. a. b. c. d. e.

20. a. b. c. d. e.

21. a. b. c. d. e.

The prim rimary tool used in step two of strate ategic planning, external and intern ernal audits, is the _____. 2 x 2 matrix 3 x 3 matrix SWOT analysis break-even an analysis none of the above (c; moderate) SWOT is an acronym for _____. success will ov overcome th threats stre streng ngth ths, s, weak weakne ness sses es,, oppo opport rtun unit itie ies, s, and and thre threat atss strate ategic wo world rldwide op opportu rtunitie ties te terms system-wi -wide organizat zational tacti ctics none of the above (b; easy) A strategy can also be called a _____. plan goal course of action tactic mission (c; moderate) A _____ answers the qu question, “how do we get fr from here to to there?” goal tactic strategy mission vision (c; easy) Translating st strat rategy in into acti ction is is th the es essence of of th the __ _____ step tep in th the st strateg tegic management process. perfor form ext externa rnal and internal audits define the business and and its mission tran ranslate th the mi mission in into st strategi egic go goals als form formu ulate late a str strat ateg egy y to to ach achie ieve ve stra strate tegi gicc goa goals ls implement the strategy (e; moderate) A co company’s __ _____ st strategy id identifies th the po portfolio of of bu businesses th that comprise the company and ways in which these businesses relate to each other. functional business-level corporate-level vertical integration competitive (c; moderate)

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Chapter 3: Strategic HRM and the HR Scorecard 

22. a. b. c. d. e.

23.

 b.  b.

d. e.

24. a. b. c. d. e.

25.

 b.  b.

d. e.

26. a. b. c. d. e.

_____ is the process ess of assessing progress toward strat rategic goals and and taki aking corrective action as needed. Strategic management Strategic pl planning Consolidation Strategic control Diversification (d; moderate) What does a company’s corporate-level strategy identify? a. how to build and strengt strengthen hen the the business’ business’ss long-term long-term compe competitive titive  position in the marketplace the the por portf tfol olio io of busi busine ness sses es that that comp compri rise se the the com compa pany ny c. the basic basic courses courses of of action action that each each departmen departmentt will pursue pursue in order to help the business attain its competitive goals the the pos possi sibi bili lity ty of beco ecomin ming a lowlow-co cosst lea leade der  r  the so source rces of of un uniqueness ess in in th the in industry (b; moderate) A co company’s __ _____ st strategy id identifies th the ho how to to bu build an and st strengthen th the  business’s long-term competitive position in the marketplace. functional business-level corporate-level vertical integration competitive (b; moderate) What does a company’s business-level strategy identify? a. how to build and strengt strengthen hen the the business’ business’ss long-term long-term compe competitive titive  position in the marketplace the the por portf tfol olio io of busi busine ness sses es that that comp compri rise se the the com compa pany ny c. the basic basic courses courses of of action action that each each departmen departmentt will pursue pursue in order to help the business attain its competitive goals the the pos possi sibi bili lity ty of beco ecomin ming a lowlow-co cosst lea leade der  r  the so source rces of of un uniqueness ess in in th the in industry (a; moderate) A company’s _____ strat rategy identifies ies the basic cou courses of action that each department will pursue in order to help the business attain its competitive goals. functional business-level corporate-level vertical integration competitive (a; moderate)

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 Human Resource Management: An Asian Perspective (Second Edition)

27.

 b.  b.

d. e.

What does a company’s functional-level strategy identify? a. how to build and strengt strengthen hen the the business’ business’ss long-term long-term compe competitive titive  position in the marketplace the the por portf tfol olio io of busi busine ness sses es that that comp compri rise se the the com compa pany ny c. the basic basic courses courses of of action action that each each departmen departmentt will pursue pursue in order to help the business attain its competitive goals the the pos possi sibi bili lity ty of beco ecomin ming a lowlow-co cosst lea leade der  r  the so source rces of of un uniqueness ess in in th the in industry (c; moderate)

28. a. b. c. d. e.

A __ _____ strategy im implies th that th the fi firm will ex expand by ad adding ne new pr product lines. consolidation diversification geographic expansion integration competitive (b; moderate)

29.

f. g. h. i. j.

Hotel International may acquire a furniture-making business. What type of  strategy is the hotel using? consolidation diversification geographic expansion integration competitive (b; moderate) 30.

a. b. c. d. e.

31.

a. b. c. d. e.

A _____ means the firm is expanding by producing its own materials or  acquiring a retail outlet to sell its own products. consolidation diversification geographic expansion vertical integration competitive (d; moderate)

A few years ago, FedEx acquired red Kinko’s. FedEx stati ations had long existed in Kinko’s stores to provide customers a convenient location. The acquisition illustrated that FedEx was following a _____ strategy. vertical integration diversification geographic expansion horizontal integration competitive (a; moderate)

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Chapter 3: Strategic HRM and the HR Scorecard 

32. a. b. c. d. e.

33. a. b. c. d. e.

SuperMa rMart is closing many of its reta etail stores res to red reduce its company size. This is an example of a _____ strategy. consolidation diversification geographic expansion integration competitive (a; moderate) Tasty No Noodle pl plans to to op open st stores in in mo more As Asian ci cities du during th the tw two ye years. This is an example of _____. consolidation diversification geographic expansion integration competitive (c; moderate)

34.

Wal-Mart is is we well kn known fo for lo lowest pr prices. Of Offering th the lo lowest pr prices is is it its  _____.

a. b. c. d. e.

35. a. b. c. d. e.

36. a. b. c. d. e.

functional strategy competitive advantage distinctive competence corporate strategy all of the above (b; moderate) A(n) (n) __ _____ is an anything th that al allows an organizati ation to to differen rentiat iate it its products cts or service from those of its competitors to increase market share. functional strategy competitive advantage distinctive competence corporate strategy all of the above (b; moderate) Companies li like Fe Ferrari ca can be ca called __ _____ because th they ca carve ou out a market niche and compete by providing a product that customers can get in no other way. market leaders focusers carvers unique offerings complementary competitors (b; easy)

36

 Human Resource Management: An Asian Perspective (Second Edition)

37. a. b. c. d. e.

Volvo stress esses the safety of its cars ars. Volvo is following a _____ com competiti itive strategy. cost leadership focus differentiation functional integration (c; moderate)

38. a. b. c. d. e.

Which of the following is a type of competitive st strategy? cost leadership vertical integration consolidation horizontal integration expansion (a; moderate)

39. a. b. c.

Which of the following illustrates a focus strategy? Good-Mart offers the lowest prices Best-Mart sells upscale brands Mercedes Benz emphasizes status and quality d. Comfy Rent-a-Car Rent-a-Car targets targets referrals referrals through through car dealersh dealerships ips and and insurance agents Sofy toilet paper claims to be the softest on the market (d; difficult)

e.

40. a. b. c.

Which of of th the fo following illustrates a cost le leadership st strategy? Good-Mart offers the lowest prices Best-Mart sells upscale brands Mercedes Benz emphasizes status and quality d. Comfy Rent-a-Car Rent-a-Car targets targets referrals referrals through through car dealersh dealerships ips and and insurance agents Sofy toilet paper claims to be the softest on the market (a; moderate)

e.

41. a. b. c.

Which of of th the fo following il illustrates a differentiation st strategy? Good-Mart offers the lowest prices Big-Saving Mart promotes itself as a way to save Mercedes Benz emphasizes status and quality d. Comfy Rent-a-Car Rent-a-Car targets targets referrals referrals through through car dealersh dealerships ips and and insurance agents e. Cut-Price Cut-Price Mart Mart promises promises to cut shoppers’ shoppers’ grocery grocery bills bills (c; difficult)

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Chapter 3: Strategic HRM and the HR Scorecard 

42.

a. b. c. d. e.

43.

a. b. c. d. e.

44.

a. b. c. d. e.

45. a. b. c. d. e.

46. a. b. c. d. e.

Micha chael Porte rter em emphasizes that al all a fir firm’s acti ctivitie ties should be tailored to to its strategy by ensuring that a firm’s functional strategies support its corporate and competitive strategies. This is called _____. match leverage fit stretch height (c; moderate) Econ Ai Airlin lines pu pursues a low-cost le leader st strategy and th then ta tailors its ac activities to that strategy. For instance, it has quick turnarounds at the gate which results in more flying time for each plane and more departures with fewer planes. Econ Airlines is an example of the _____ point of view. match leverage fit stretch height (c; moderate) Leveraging re resources by by su supplementing wh what a company ha has an and do doing mo more with what it has to take advantage of an opportunity means that the company has a  _____ point of view. match leverage fit stretch height (d; moderate) Which of of th the fo following basic st strategic pl planning ro roles is fu fulfilled by by HR  managers? perform external and internal audits execute strategy translate the mission into strategic goals formulate strategy both b and d (e; moderate) A co company’s ba basic __ _____ is is made up up of of HR HR pr professionals, th the HR HR sy system, an and the resulting employee behaviors. HR architecture structure strategy HR function none of the above (a; easy)

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 Human Resource Management: An Asian Perspective (Second Edition)

47. a.

Human resource policies and practices are part of the ______. HR function HR system HR architecture employee culture company norms (b; difficult)

b. c. d. e.

48. a. b. c. d. e.

49.

a. b. c. d. e.

50.

a. b. c. d. e.

Which of of th the fo following is is no not an an or organizational pr practice in included in in Hi HighPerformance Work Systems? job enrichment job enlargement employee development flexible work assignments team-based organizations (b; difficult) Managers use a(n) __ _____ to measure th the HR function’s effectiveness and efficiency in producing employee behaviors the company needs to achieve its strategic goals. metric HR Scorecard time high pe performance wo work system MBO format (b; easy) The co concise me measurement sy system us used by by co companies to to sh show th the qu quantitative standards the firm uses to measure HR activities, employee behaviors resulting from the activities, and the strategically relevant organizational outcomes of those employee behaviors is called a(n) _____. evaluation system HR scorecard appraisal system evaluation benchmark   annual report (b; moderate)

51. a. b. c. d. e.

What is the second step in using the HR Scorecard approach? outline the company’s value chain identify the strategically-required organizational outcomes define the business strategy design the HR scorecard measurement system evaluate the measurement system (a; moderate)

52.

s

39

Chapter 3: Strategic HRM and the HR Scorecard 

What is the first step in using the HR Scorecard approach? a. outline the company’s value chain b. identify the strategically-required organizational outcomes c. define the business strategy d. design the HR scorecard measurement system e. evaluate the measurement system (c; moderate) 53. a. b. c. d. e.

54. a. b. c. d. e.

55. a. b. c. d. e.

56. a. b. c. d. e.

57. a. b. c. d. e.

What is the fi final step in using the HR HR Scorecard approach? outline the company’s value chain identify the strategically-required organizational outcomes define the business strategy design the HR scorecard measurement system evaluate the measurement system (e; moderate) Ide Identify the Strategi egicall ally Required Orga rganizational Outcomes is the _____ step in using the HR Scorecard approach. first second third fourth fifth (c; moderate) Outline the company’s value chain is the _____ step in using the HR  Scorecard approach. first second third fourth fifth (b; moderate) Define th the bu business st strategy is is the __ _____ step in in us using the HR HR Scorecard approach. first second third fourth fifth (a; moderate) Ide Identifying the Required Workforc forcee Competencie cies and Behaviors is the _____  step in using the HR Scorecard approach. second third fourth fifth sixth (c; moderate) 40

 Human Resource Management: An Asian Perspective (Second Edition)

58. a. b. c. d. e.

59. a. b. c. d. e.

60. a. b. c. d. e.

61. a. b. c. d. e.

62. a. b. c. d. e.

Ide Identifying th the strategi egicall ally rel relevant ant HR HR system policies and and act activiti ities is the  _____ step in using the HR Scorecard approach. second third fourth fifth sixth (d; moderate) During which step of the HR Scorecard approach are the HR enablers and deliverables identified? second third fourth fifth sixth (d; moderate) During which step of the HR Scorecard approach are the proper metrics decided upon? second third fourth fifth sixth (e; moderate) Which stage age of the HR Scorec recard approach ach is rep repeat eated peri eriodically to ensure validity of the measures? outline the company’s value chain identify the strategically-required organizational outcomes define the business strategy design the HR scorecard measurement system evaluate the measurement system (e; moderate) A co company’s __ _____ id identifies th the pr primary ac activities th that cr create va value fo for  customers and the related support activities. value chain HR scorecard strategy tactical approach none of the above (a; easy)

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Chapter 3: Strategic HRM and the HR Scorecard 

63. a. b. c. d. e.

64. a. b. c. d. e.

65. a. b.

66. a. b.

67. a. b. c. d. e.

HR system activiti ities that help prod roduce valuable workforce compete etencie cies and  behaviors are called _____. performance drivers HR deliverables HR competencies strategic outcomes both a and b (e; moderate) Which of the following is not a type of measure used to assess HR   performance drivers such as employee motivation and morale? employee at attitude su surveys employee turnover   numb number er of quali ualifi fied ed appl applic ican ants ts per posi positi tio on emp employee commitment ent surve rvey scores customer complaints (c; difficult) Which of of th the fo following is a type of of me measure fo for as assessing HR pe performance drivers like employee motivation? proportion of merit pay determined by formal performance appraisal percentage of employees eligible for annual merit plan c. percentage percentage of difference difference in incentive incentive pay pay between between the low low performin performing g and high performing employees d. percentage percentage of of retentio retention n of high performing performing employees employees e. percen percentag tagee of jobs jobs fill filled ed from from within within (d; difficult) Which of the following is not a type of of measure for assessing HR enablers such as testing, training, and reward policies? proportion of merit pay determined by formal performance appraisal percentage of employees eligible for annual merit plan c. percentage percentage of difference difference in incentive incentive pay pay between between the low low performin performing g and high performing employees d. empl employ oyee ee atti attitu tude de sur surve veys ys e. percen percentag tagee of jobs jobs fill filled ed from from within within (d; difficult) Which of the following is a type of measure for assessing HR enablers? level of cross-cultural teamwork   level of organizational learning requests for transfer   customer complaints number of hours of training employees receive each year   (e; moderate)

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 Human Resource Management: An Asian Perspective (Second Edition)

68. a. b. c. d. e.

HR enablers consist of all of the following except _____. selection policies practices employee capabilities reward policies training policies (c; moderate)

69. a. b. c. d. e.

70. a. b. c. d. e.

HR performance drivers include all of the following except _____. employee morale reward policies employee commitment employee values employee motivation (b; moderate) The _____ scorecard is to the company what the HR scorecard is to the HR  function. corporate business-level competitive balanced functional (d; moderate) True/ False

71.

There are six steps in the strategic management process. (T; easy)

72.

HR managers need to support corporate productivity and performance improvement efforts. (T; moderate)

73.

Employees pl play a minimal ro role in in the pe performance im improvement ef efforts of  their employers. (F; easy)

74.

HR is only involved in the execution of of a company’s strategic pl plan. (F; moderate)

75.

A miss ission stateme ement is a general state atement of a company’s intend ended direct ection that evokes emotional feelings in the organization’s members. (F; easy)

76.

A vision statement is broader an and more future-oriented than a mission statement. (T; easy)

77.

Mission statements tend to focus on past successes. (F; easy)

78.

Strategy im implementation dr draws more on on the le leading ma management fu function than on the functions of planning, organizing, staffing, and controlling. (F; difficult)

79.

Consolidation keeps the company’s strate ategy up to date by assessing ing progress toward strategic goals and taking corrective action as needed. (F; moderate) 43

Chapter 3: Strategic HRM and the HR Scorecard 

80.

Managers engage in three le levels of strategic pl planning. (T; moderate)

81.

Cost leadership, differen rentiat iation, an and foc focus strategies all ty types of corporatelevel strategy. (F; moderate)

82.

A vert ertical integration strat rategy means ans that the firm will expand by adding new  product lines. (F; easy)

83.

McDo cDonald’s address essed it its lag lagg ging pr profitability by by fi first cl closing st stores op operating  below its guidelines. McDonald’s used a consolidation strategy. (T; moderate)

84.

Pizza Hu Hut’s st strategy fo for co competing ag against Do Domino’s is is a business-level strategy. (T; moderate)

85.

FedEx’s ac acquisition of of Ki Kinko’s is is a corporate-level st strategic mo move. (T (T; moderate)

86.

Dell’s strategy of developing an HR portal on the company website to support its low-cost competitive strategy is an example of an integration strategy. (F; difficult)

87.

The concept of stret retch states that a firm’s acti ctivities ies must be tailored to its strategy. (F; easy)

88.

Levera eraging resources is a necessary act action for companies stret retching to take advantage of an opportunity. (T; moderate)

89.

Strategic hu human re resource ma management me means fo formulating an and ex executing HR  HR  systems that produce the employee competencies and behaviors the company needs to achieve its strategic aims. (T; moderate)

90.

A co company’s HR HR st strategy is is a type of of co competitive st strategy. (F (F; di difficult)

91.

Many executives see HR as a cost center. (T; easy)

92.

HR managers fulfill the first two steps of the strat rategic management process. (F; moderate)

93.

The ba basic HR architecture includes three co components: the HR system, HR   professionals, and the resulting employee behaviors. (T; moderate)

94.

HR ma managers us use th the HR HR Scorecard to to measure th the su success of th the va value ch chain throughout an organization. (F; moderate)

95.

The HR Scorecard meas easures the HR fun function’s effe ffectiveness and efficie ciency in  producing desirable employee behaviors. (T; easy) A co company’s sp specific st strategy is irrelevant to to the HR HR Scorecard because human resources always strive for productive employee behaviors. (F; moderate)

96.

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 Human Resource Management: An Asian Perspective (Second Edition)

97.

To cr create an an HR HR Sc Scorecard, th the ma manager sh should un understand th the ca causal li links  between the HR activities, the employee behaviors, the organizational outcomes, and the organization’s performance. (T; moderate)

98.

The ba balanced scorecard does for the company as a whole what th the HR  scorecard does for the HR function. (T; easy)

99.

The balanc anced scorecar card is an accounting tool base ased on a computeriz rized model. (F; moderate)

100.

In a serv ervice business ess, the product is is satisfied guests. (T; moderate)  Essay/ Short Answer 

101.

What are the th three ree ba basic ch challeng enges HR HR ma manage agers must ad address ess in in fo formulating HR strategies? Which of these is the most difficult for HR? (moderate) Answer: The three challenges are the need to support corporate productivity productivity and performance improvement efforts, to encourage employees to plan an expanded role in employers’ performance improvement efforts, and to be more involved in the design and execution of the company’s strategic plan. The final challenge is key as HR has traditionally been involved more in the execution rather than the design of strategic plans.

102.

What is st strat rategic man manaagement ent? Def Defiine th the te term. Li List an and de descri cribe th the si six st steps in the strategic management process. (moderate) Answer: Strategic management is the process of identifying and executing the organization’s mission, by matching the organization’s capabilities with the demands of its environment. The steps are as follows: Step 1: Define the Business Business and Its Mission Step 2: Perform External and Internal Audits Step 3: Translate the Mission Mission into Strategic Goals Step 4: Formulate a Strategy to Achieve the Strategic Goals Step 5: Implement the Strategy Step 6: Evaluate Performance

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Chapter 3: Strategic HRM and the HR Scorecard 

103.

Explain th the dif diffferen rence be between a vision an and a mission. Ar Are bo both nec neceessary for  organizations? (moderate) Answer: A company’s vision vision is a general statement of the company’s intended direction that evokes emotional feelings in organization members. It is broader than a mission statement. It is future-oriented while mission statements are oriented in the present. Mission statements state what a company is doing right now while vision statements are what a company strives to become. Both are encouraged for organizations but some organizations have only a mission statement. Others may have neither a mission nor a vision.

104.

During th the st strategic ma management pr process, ma managers ma may us use a SWOT analysis. Explain how to use a SWOT analysis and provide an example using a wellknown company. (moderate) Answer: The SWOT analysis is used during the second step of the strategic management process. It facilitates the audit of external and internal situations. SWOT stands for strengths, weaknesses, opportunities, and threats. Managers can create a chart listing the strengths of the company, the weaknesses, and opportunities in the environment and threats in the environment. The chart makes it easy to see where strengths can lead to opportunities or how weaknesses may need to be solved to avoid threats. Students should provide an example with this answer.

105. 05.

Expl Explai ain n the the thre threee lev levels els of stra strate teg gic plann lannin ing g. What hat is the the purpo urpose se or focu focuss for  for  each level? Which level do HR strategies represent? (easy) Answer: The three levels are corporate-level, business-level, business-level, and functionallevel strategies. Corporate-level strategy identifies the portfolio of businesses that comprise the company and the ways in which these businesses relate to each other. The business-level strategy is the next level. It identifies how to  build and strengthen the business’s long-term competitive position in the marketplace. The lowest level is the functional-level strategies. Functional strategies identify the basic course of action that each department will pursue in order to help the business attain its competitive goals. HR strategies are a type of functional strategy.

106.

There are three pr primary fo forms of of bu business-leve evel or or co competitiv tive st strat rategies. Describe them and give an example of each one. (moderate) Answer: The three forms of competitive strategies are cost leadership, differentiation, and focus. Cost leadership means offering the lowest prices and/or emphasizing low costs and efficiency as a source of competitive advantage. Wal-Mart is an example of a company pursuing a cost leadership strategy. Differentiation means emphasizing a source of difference between a company and its competitors. The differential advantage becomes the source of competitive advantage. Target follows a differentiation strategy. A focus strategy means that a company pursues a small niche in the market place. Ferrari follows this strategy. 46

 Human Resource Management: An Asian Perspective (Second Edition)

107.

Some st strat rategic pl planning ex experts em emphasize fi fit wh while ot others su support th the us use of  of  stretch. Explain these two opposing concepts. Which do you think is best? (diff icult) Answer: The fit point of view means that all of a firm’s activities must be tailored to fit its strategy. This ensures that a firm’s functional strategies support its corporate and competitive strategies. Southwest Airlines is an example of a firm using the fit approach. On the other hand, stretch means leveraging resources to take advantage of opportunities. Stretch is the riskier  of the two approaches. Fit is necessary overall to ensure success but stretch allows a firm to grow and better compete in the market place. Ultimately, firms should strive to incorporate fit while considering stretch to take advantage of opportunities.

108.

Describ ribe th the components of a company’s basis HR architect ecture. (ea (eassy) Answer: A company’s basic HR architecture is made up of three elements: HR   professionals, the HR system, and the employee behaviors and competencies required for the company’s strategy. The HR professionals have the necessary skills to build a strategy-oriented HR system. The HR system is made up of  the HR policies and activities such as how the company recruits, selects, trains, and rewards employees.

109.

What is a High-Per -Perfformance Work System? Explain the effect ects of such a system. (moderate) Answer: A high-performance work system is what managers now expect from the HR system. It means that the HR system is designed to maximize the overall quality of human capital throughout the organization. Based on ongoing research, firms that use HPWS practices perform at a significantly higher level than those that do not.

110.

What is th the HR HR Sc Scorecard ard ap approach? Id Identify th the se seven st steps in in us using th the HR  HR  Scorecard approach to create a strategy-oriented HR system. (moderate) Answer: The HR Scorecard is a concise measurement system that shows the quantitative standards, or “metrics” the firm uses to measure HR activities, and to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee  behaviors. The seven steps are as follows: Step 1: Define the business strategy strategy Step 2: Outline the company’s value chain Step 3: Identify the strategically required organizational outcomes Step 4: Identify the required workforce competencies and behaviors Step 5: Identify the strategically relevant HR system policies and activities Step 6: Design the HR Scorecard measurement system Step 7: Periodically evaluate the measurement system

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